```markdown [Balance Sheet Data](index=2&type=section&id=BALANCE%20SHEET%20DATA) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time [Balance Sheet Overview](index=2&type=section&id=Balance%20Sheet%20Overview) Republic Bancorp, Inc.'s balance sheet as of March 31, 2025, shows an increase in total assets and stockholders' equity compared to December 31, 2024, primarily driven by higher cash and cash equivalents and an increase in total deposits. Loans, net, experienced a slight decrease **Key Balance Sheet Data (in thousands):** | Metric | Mar. 31, 2025 | Dec. 31, 2024 | QoQ Change ($) | QoQ Change (%) | | :-------------------------------- | :------------ | :------------ | :------------- | :------------- | | Total assets | $7,075,555 | $6,846,667 | $228,888 | 3.34% | | Total deposits | $5,405,892 | $5,210,546 | $195,346 | 3.75% | | Stockholders' equity | $1,034,089 | $992,029 | $42,060 | 4.24% | | Loans, net | $5,183,490 | $5,347,488 | $(163,998) | -3.07% | | Cash and cash equivalents | $793,020 | $432,151 | $360,869 | 83.50% | [Average Balance Sheet Data](index=3&type=section&id=AVERAGE%20BALANCE%20SHEET%20DATA) This section presents average balances for assets and liabilities over specific periods, offering insights into balance sheet structure and trends [Average Balance Sheet Trends](index=3&type=section&id=Average%20Balance%20Sheet%20Trends) For the three months ended March 31, 2025, average total assets increased compared to the previous quarter and year-ago period, primarily due to higher noninterest-earning cash and cash equivalents. Average interest-earning assets remained relatively stable year-over-year, while average interest-bearing liabilities saw a slight increase **Average Balance Sheet Data (in thousands):** | Metric | Three Months Ended Mar. 31, 2025 | Three Months Ended Dec. 31, 2024 | QoQ Change (%) | Three Months Ended Mar. 31, 2024 | YoY Change (%) | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------- | :------------------------------- | :------------- | | Total interest-earning assets | $6,634,278 | $6,491,473 | 2.19% | $6,641,448 | -0.11% | | Total interest-bearing liabilities | $4,671,529 | $4,434,078 | 5.36% | $4,643,647 | 0.60% | | Total assets | $7,335,756 | $6,900,626 | 6.30% | $7,219,572 | 1.61% | | Stockholders' equity | $1,022,844 | $997,435 | 2.55% | $933,042 | 9.62% | | Noninterest-earning cash and cash equivalents | $389,994 | $93,927 | 315.20% | $280,618 | 38.98% | [Total Company Average Balance Sheets and Interest Rates](index=4&type=section&id=TOTAL%20COMPANY%20AVERAGE%20BALANCE%20SHEETS%20AND%20INTEREST%20RATES) This section analyzes the company's net interest income, spread, and margin, detailing the impact of average balances and interest rates on profitability [Net Interest Income and Margin Analysis](index=4&type=section&id=Net%20Interest%20Income%20and%20Margin%20Analysis) The company reported an increase in net interest income and significant improvements in net interest spread and net interest margin for the three months ended March 31, 2025, compared to the same period last year. This was driven by a higher yield on interest-earning assets and a lower cost of interest-bearing liabilities **Net Interest Performance (Q1 2025 vs Q1 2024):** | Metric | Three Months Ended Mar. 31, 2025 | Three Months Ended Mar. 31, 2024 | YoY Change ($) | YoY Change (bps) | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------- | :--------------- | | Net interest income | $102,688 | $96,919 | $5,769 | - | | Net interest spread | 5.58% | 4.99% | - | 59 bps | | Net interest margin | 6.28% | 5.87% | - | 41 bps | | Yield on average interest-earning assets | 7.94% | 7.91% | - | 3 bps | | Cost of average interest-bearing liabilities | 2.36% | 2.92% | - | -56 bps | **Average Balances and Rates for Key Items (Q1 2025 vs Q1 2024, in thousands):** | Item | Q1 2025 Average Balance | Q1 2025 Rate | Q1 2024 Average Balance | Q1 2024 Rate | YoY Balance Change ($) | | :----------------------------------- | :---------------------- | :----------- | :---------------------- | :----------- | :--------------------- | | Federal funds sold and other interest-earning deposits | $516,785 | 4.45% | $454,426 | 5.57% | $62,359 | | Investment securities, including FHLB stock | $619,525 | 3.48% | $732,678 | 2.98% | $(113,153) | | Outstanding Warehouse lines of credit | $458,657 | 7.07% | $340,433 | 7.98% | $118,224 | | Money market accounts | $1,348,717 | 2.85% | $1,066,046 | 3.32% | $282,671 | | Brokered deposits | $247,319 | 4.57% | $421,096 | 5.39% | $(173,777) | | Federal Home Loan Bank advances and other long-term borrowings | $520,778 | 4.39% | $536,209 | 4.94% | $(15,431) | [Income Statement Data](index=5&type=section&id=INCOME%20STATEMENT%20DATA) This section outlines the company's financial performance over specific periods, highlighting key revenue, expense, and net income figures [Quarterly Income Statement Performance](index=5&type=section&id=Quarterly%20Income%20Statement%20Performance) The company experienced a substantial increase in net income for Q1 2025 compared to both the previous quarter and the prior year, primarily driven by higher net interest income and a significant increase in noninterest income, including a gain on the sale of Visa Class B-1 Shares. Provision for credit losses decreased year-over-year **Income Statement Highlights (in thousands):** | Metric | Mar. 31, 2025 | Dec. 31, 2024 | QoQ Change (%) | Mar. 31, 2024 | YoY Change (%) | | :-------------------------------- | :------------ | :------------ | :------------- | :------------ | :------------- | | Net interest income | $102,688 | $75,394 | 36.21% | $96,919 | 5.95% | | Provision for expected credit loss expense | $17,672 | $12,951 | 36.46% | $30,622 | -42.29% | | Total noninterest income | $33,154 | $14,118 | 134.84% | $23,373 | 41.85% | | Total noninterest expense | $58,208 | $53,511 | 8.78% | $50,971 | 14.20% | | Income before income tax expense | $59,962 | $23,050 | 160.14% | $38,699 | 54.99% | | Net income | $47,268 | $19,016 | 148.57% | $30,606 | 54.47% | - Total noninterest income for Q1 2025 includes a **$4.090 million gain** on the sale of Visa Class B-1 Shares, which was not present in previous quarters. Core conversion & contract consulting fees of **$5.714 million** were recorded in Q1 2025, contributing to the increase in noninterest expense[10](index=10&type=chunk) [Selected Data and Ratios](index=6&type=section&id=SELECTED%20DATA%20AND%20RATIOS) This section presents key financial ratios and per-share data, providing insights into the company's profitability, efficiency, and shareholder value [Per Share Data and Performance Ratios](index=6&type=section&id=Per%20Share%20Data%20and%20Performance%20Ratios) The company demonstrated strong financial performance in Q1 2025 with significant improvements in profitability ratios such as Return on Average Assets and Return on Average Equity, and a notable decrease in the Efficiency Ratio. Earnings per share for Class A Common Stock increased substantially year-over-year **Per Share Data:** | Metric | Mar. 31, 2025 | Dec. 31, 2024 | QoQ Change (%) | Mar. 31, 2024 | YoY Change (%) | | :-------------------------------- | :------------ | :------------ | :------------- | :------------ | :------------- | | Basic EPS - Class A Common Stock | $2.43 | $0.99 | 145.45% | $1.59 | 52.83% | | Diluted EPS - Class A Common Stock | $2.42 | $0.98 | 146.94% | $1.58 | 53.16% | | Book value per share | $52.98 | $51.01 | 3.86% | $48.20 | 9.92% | | Tangible book value per share | $50.46 | $48.47 | 4.10% | $45.63 | 10.58% | | Cash dividends declared per Class A Common share | $0.451 | $0.407 | 10.81% | $0.407 | 10.81% | **Performance Ratios:** | Metric | Mar. 31, 2025 | Dec. 31, 2024 | QoQ Change (bps) | Mar. 31, 2024 | YoY Change (bps) | | :-------------------------------- | :------------ | :------------ | :--------------- | :------------ | :--------------- | | Return on average assets | 2.61% | 1.10% | 151 bps | 1.70% | 91 bps | | Return on average equity | 18.74% | 7.63% | 1111 bps | 13.12% | 562 bps | | Efficiency ratio | 40.3% | 59.8% | -1950 bps | 42.3% | -200 bps | | Net interest margin - Total Company | 6.28% | 4.62% | 166 bps | 5.87% | 41 bps | | Net interest margin - Core Bank | 3.70% | 3.64% | 6 bps | 3.30% | 40 bps | | Cost of average deposits | 1.57% | 1.79% | -22 bps | 1.97% | -40 bps | [Loan Composition](index=7&type=section&id=LOAN%20COMPOSITION) This section details the breakdown of the company's loan portfolio by category, illustrating the distribution and changes in loan types [Loan Portfolio Breakdown](index=7&type=section&id=Loan%20Portfolio%20Breakdown) As of March 31, 2025, total loans decreased slightly quarter-over-quarter, with a notable decrease in Republic Processing Group (RPG) loans, particularly Tax Refund Solutions (TRS) Refund Advances, while Core Banking loans remained relatively stable **Loan Composition (in thousands):** | Loan Category | Mar. 31, 2025 | Dec. 31, 2024 | QoQ Change ($) | QoQ Change (%) | | :-------------------------------- | :------------ | :------------ | :------------- | :------------- | | Total Traditional Banking | $4,566,359 | $4,569,179 | $(2,820) | -0.06% | | Warehouse lines of credit | $569,502 | $550,760 | $18,742 | 3.40% | | **Total Core Banking** | **$5,135,861** | **$5,119,939** | **$15,922** | **0.31%** | | Tax Refund Solutions: Refund Advances | $30,344 | $138,614 | $(108,270) | -78.11% | | Total Republic Processing Group | $153,932 | $319,527 | $(165,595) | -51.82% | | **Total loans - Total Company** | **$5,289,793** | **$5,439,466** | **$(149,673)** | **-2.75%** | [Allowance for Credit Losses on Loans](index=7&type=section&id=ALLOWANCE%20FOR%20CREDIT%20LOSSES%20ON%20LOANS) This section analyzes the allowance for credit losses across different loan categories, reflecting the company's assessment of potential loan defaults [Allowance for Credit Losses Analysis](index=7&type=section&id=Allowance%20for%20Credit%20Losses%20Analysis) The total allowance for credit losses increased significantly quarter-over-quarter, primarily driven by a substantial rise in the allowance for Tax Refund Solutions within the Republic Processing Group, reflecting a higher allowance to total loans ratio for this segment **Allowance for Credit Losses (in thousands):** | Category | Mar. 31, 2025 | Dec. 31, 2024 | QoQ Change ($) | QoQ Change (%) | | :-------------------------------- | :------------ | :------------ | :------------- | :------------- | | Traditional Banking | $58,851 | $59,756 | $(905) | -1.51% | | Warehouse Lending | $1,421 | $1,374 | $47 | 3.42% | | **Total Core Banking** | **$60,272** | **$61,130** | **$(858)** | **-1.40%** | | Tax Refund Solutions | $25,981 | $9,861 | $16,120 | 163.47% | | Republic Credit Solutions | $20,050 | $20,987 | $(937) | -4.46% | | **Total Republic Processing Group** | **$46,031** | **$30,848** | **$15,183** | **49.22%** | | **Total Allowance - Total Company** | **$106,303** | **$91,978** | **$14,325** | **15.57%** | **Allowance to Total Loans Ratios:** | Category | Mar. 31, 2025 | Dec. 31, 2024 | QoQ Change (bps) | | :-------------------------------- | :------------ | :------------ | :--------------- | | Traditional Banking | 1.29% | 1.31% | -2 bps | | Warehouse Lending | 0.25% | 0.25% | 0 bps | | Total Core Banking | 1.17% | 1.19% | -2 bps | | Tax Refund Solutions | 71.80% | 5.17% | 6663 bps | | Republic Credit Solutions | 17.03% | 16.30% | 73 bps | | Total Republic Processing Group | 29.90% | 9.65% | 2025 bps | | Total Company | 2.01% | 1.69% | 32 bps | [Credit Quality Data and Ratios](index=8&type=section&id=CREDIT%20QUALITY%20DATA%20AND%20RATIOS) This section provides key metrics and ratios related to the company's asset quality, including nonperforming assets, delinquent loans, and net charge-offs [Credit Quality Performance](index=8&type=section&id=Credit%20Quality%20Performance) The company's overall credit quality remained stable to improving in Q1 2025. Total nonperforming assets showed a slight increase QoQ but a decrease YoY, while total delinquent loans decreased QoQ. Net charge-offs for the total company remained relatively low, with Tax Refund Solutions showing net recoveries **Credit Quality Asset Balances (in thousands):** | Metric | Mar. 31, 2025 | Dec. 31, 2024 | QoQ Change (%) | Mar. 31, 2024 | YoY Change (%) | | :-------------------------------- | :------------ | :------------ | :------------- | :------------ | :------------- | | Total nonperforming assets - Total Company | $23,957 | $23,920 | 0.15% | $22,860 | 4.80% | | Total delinquent loans - Total Company | $17,313 | $20,489 | -15.49% | $21,412 | -19.14% | | Total NCOs (recoveries) - Total Company | $3,347 | $3,136 | 6.73% | $4,050 | -17.36% | | Tax Refund Solutions NCOs (recoveries) | $(693) | $(2,159) | -67.99% | $(305) | 127.21% | **Credit Quality Ratios - Total Company:** | Ratio | Mar. 31, 2025 | Dec. 31, 2024 | QoQ Change (bps) | Mar. 31, 2024 | YoY Change (bps) | | :-------------------------------- | :------------ | :------------ | :--------------- | :------------ | :--------------- | | Nonperforming loans to total loans | 0.43% | 0.42% | 1 bps | 0.41% | 2 bps | | Nonperforming assets to total assets | 0.34% | 0.35% | -1 bps | 0.33% | 1 bps | | Allowance for credit losses to total loans | 2.01% | 1.69% | 32 bps | 2.08% | -7 bps | | Allowance for credit losses to nonperforming loans | 465% | 404% | 6100 bps | 509% | -4400 bps | | Delinquent loans to total loans | 0.33% | 0.38% | -5 bps | 0.41% | -8 bps | | NCOs (recoveries) to average loans (annualized) | 0.24% | 0.24% | 0 bps | 0.30% | -6 bps | [Segment Data](index=9&type=section&id=SEGMENT%20DATA) This section presents financial information broken down by the company's distinct business segments, offering insights into their individual contributions to overall performance [Reportable Segments Overview](index=9&type=section&id=Reportable%20Segments%20Overview) Republic Bancorp, Inc. is structured into five reportable segments: Traditional Banking, Warehouse Lending (together forming "Core Bank"), Tax Refund Solutions (TRS), Republic Payment Solutions (RPS), and Republic Credit Solutions (RCS) (together forming "Republic Processing Group" or "RPG"). Each segment offers distinct products and services, with primary revenue drivers varying from net interest income to program fees and net refund transfer fees - The Company's five reportable segments are: - **Traditional Banking:** Provides traditional banking products to clients in its market footprint, primarily via banking centers and digital channels. Primary driver of net revenue is net interest income - **Warehouse Lending:** Provides short-term, revolving credit facilities to mortgage bankers across the United States. Primary driver of net revenue is net interest income - **Tax Refund Solutions (TRS):** Offers tax-related credit products and facilitates the receipt and payment of federal and state tax refunds. Primary drivers are net interest income and net refund transfer fees - **Republic Payment Solutions (RPS):** Offers general-purpose reloadable cards. Primary drivers are net interest income and program fees - **Republic Credit Solutions (RCS):** Offers consumer credit products, with a substantial portion of clients considered subprime or near-prime borrowers. Primary drivers are net interest income and program fees[15](index=15&type=chunk)[16](index=16&type=chunk) [Segment Financial Performance](index=10&type=section&id=Segment%20Financial%20Performance) For Q1 2025, Core Banking reported a net income of $17.361 million, while Republic Processing Group (RPG) reported a net income of $29.907 million, significantly higher than the prior year. TRS was a major contributor to RPG's net income, driven by net interest income and net refund transfer fees **Net Income by Segment (in thousands):** | Segment | Three Months Ended Mar. 31, 2025 | Three Months Ended Mar. 31, 2024 | YoY Change ($) | YoY Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :------------- | :------------- | | Traditional Banking | $15,712 | $12,283 | $3,429 | 27.91% | | Warehouse Lending | $1,649 | $839 | $810 | 96.54% | | **Total Core Banking** | **$17,361** | **$13,122** | **$4,239** | **32.31%** | | Tax Refund Solutions | $19,611 | $8,793 | $10,818 | 123.03% | | Republic Payment Solutions | $2,895 | $2,567 | $328 | 12.78% | | Republic Credit Solutions | $7,401 | $6,124 | $1,277 | 20.85% | | **Total RPG** | **$29,907** | **$17,484** | **$12,423** | **71.05%** | | **Total Company** | **$47,268** | **$30,606** | **$16,662** | **54.47%** | **Net Interest Income by Segment (in thousands):** | Segment | Three Months Ended Mar. 31, 2025 | Three Months Ended Mar. 31, 2024 | YoY Change ($) | YoY Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :------------- | :------------- | | Traditional Banking | $53,321 | $48,259 | $5,062 | 10.49% | | Warehouse Lending | $3,028 | $2,257 | $771 | 34.16% | | Tax Refund Solutions | $29,812 | $30,910 | $(1,098) | -3.55% | | Republic Payment Solutions | $3,994 | $3,508 | $486 | 13.86% | | Republic Credit Solutions | $12,533 | $11,985 | $548 | 4.57% | - Net refund transfer fees for Tax Refund Solutions increased by **28.40% YoY** to **$13.893 million** in Q1 2025 from **$10.820 million** in Q1 2024[17](index=17&type=chunk) [Footnotes](index=11&type=section&id=FOOTNOTES) This section provides supplementary details and definitions for various financial metrics and accounting treatments used throughout the report [Loan Fee Income Impact](index=11&type=section&id=Loan%20Fee%20Income%20Impact) Loan fee income significantly influences total interest income, loan yields, net interest margin, and net interest spread. For Q1 2025, total loan fees were $47.513 million, primarily driven by the Republic Processing Group, particularly Tax Refund Solutions **Total Loan Fees by Segment (in thousands):** | Segment | Mar. 31, 2025 | Dec. 31, 2024 | QoQ Change (%) | Mar. 31, 2024 | YoY Change (%) | | :---------------- | :------------ | :------------ | :------------- | :------------ | :------------- | | Traditional Banking | $1,291 | $1,161 | 11.20% | $1,366 | -5.50% | | Warehouse Lending | $310 | $308 | 0.65% | $263 | 17.87% | | **Total Core Bank** | **$1,601** | **$1,469** | **8.98%** | **$1,629** | **-1.72%** | | TRS | $33,675 | $2,605 | 1192.71% | $35,871 | -6.12% | | RCS | $12,237 | $12,569 | -2.64% | $11,372 | 7.61% | | **Total RPG** | **$45,912** | **$15,174** | **202.57%** | **$47,243** | **-2.82%** | | **Total loan fees - Total Company** | **$47,513** | **$16,643** | **185.48%** | **$48,872** | **-2.78%** | [Provision for Expected Credit Loss Expense](index=11&type=section&id=Provision%20for%20Expected%20Credit%20Loss%20Expense) The provision for expected credit loss expense covers losses on both on-balance sheet loans and investment securities. Separately, provision expense for off-balance sheet credit exposures is categorized under "Other" noninterest expense - Provision for expected credit loss expense includes provisions for losses on on-balance sheet loans and investment securities. Provision expense for off-balance sheet credit exposures is a component of "Other" noninterest expense[19](index=19&type=chunk) [Mortgage and Consumer Loans Held for Sale](index=11&type=section&id=Mortgage%20and%20Consumer%20Loans%20Held%20for%20Sale) The Bank originates mortgage loans for sale primarily through its Traditional Banking segment and consumer loans for sale through the RCS segment. In Q1 2025, the Traditional Banking segment agreed to sell $5.0 million of consumer credit cards, transferring them from held for investment to held for sale **Mortgage Loans Held for Sale (in thousands):** | Metric | Mar. 31, 2025 | Mar. 31, 2024 | YoY Change (%) | | :-------------------------------- | :------------ | :------------ | :------------- | | Originations | $41,233 | $27,046 | 52.46% | | Proceeds from sales | $(41,816) | $(18,773) | 122.74% | | Net gain on sale | $1,411 | $917 | 53.87% | | Balance, end of period | $9,140 | $80,884 | -88.73% | **Consumer Loans Held for Sale (in thousands):** | Metric | Mar. 31, 2025 | Mar. 31, 2024 | YoY Change (%) | | :-------------------------------- | :------------ | :------------ | :------------- | | Originations | $266,651 | $188,347 | 41.58% | | Transferred from held for investment to held for sale | $4,977 | $0 | NA | | Proceeds from sales | $(266,633) | $(196,584) | 35.64% | | Net gain on sale | $3,055 | $3,405 | -10.28% | | Balance, end of period | $32,125 | $19,176 | 67.53% | [Non-GAAP Reconciliations](index=12&type=section&id=Non-GAAP%20Reconciliations) The company provides non-GAAP measures like tangible book value per share and adjusted efficiency ratio to offer additional insights into capital adequacy and operational efficiency. Tangible stockholders' equity excludes goodwill, mortgage servicing rights, and core deposit intangible. The adjusted efficiency ratio excludes nonrecurring items such as the gain on Visa Class B-1 shares, core system conversion fees, and merger expenses **Tangible Stockholders' Equity Reconciliation (in thousands):** | Metric | Mar. 31, 2025 | Mar. 31, 2024 | YoY Change (%) | | :-------------------------------- | :------------ | :------------ | :------------- | | Total stockholders' equity - GAAP | $1,034,089 | $935,583 | 10.53% | | Less: Goodwill | $40,516 | $40,516 | 0.00% | | Less: Mortgage servicing rights | $6,875 | $7,102 | -3.19% | | Less: Core deposit intangible | $1,841 | $2,302 | -20.03% | | **Tangible stockholders' equity - Non-GAAP** | **$984,857** | **$885,663** | **11.20%** | | Tangible stockholders' equity to tangible assets - Non-GAAP | 14.02% | 12.98% | 104 bps | | Tangible book value per share - Non-GAAP | $50.46 | $45.63 | 10.58% | **Adjusted Efficiency Ratio Reconciliation (in thousands):** | Metric | Mar. 31, 2025 | Mar. 31, 2024 | YoY Change (bps) | | :-------------------------------- | :------------ | :------------ | :--------------- | | Efficiency Ratio - GAAP-derived | 42.8% | 42.4% | 4 bps | | **Adjusted Efficiency Ratio - Non-GAAP** | **40.3%** | **42.3%** | **-200 bps** | | Adjustments to Total Net Revenue (Q1 2025): | | | | | Less: Gain on sale of Visa Class B-1 shares | $4,090 | $0 | NA | | Less: Insurance proceeds | $1,571 | $0 | NA | | Adjustments to Noninterest Expense (Q1 2025): | | | | | Less: Core conversion & contract consulting fees | $5,714 | $0 | NA | | Less: Expenses related to CBank acquisition (Q1 2024) | $0 | $41 | NA | [Other Definitions](index=12&type=section&id=Other%20Definitions) This section defines key terms and calculation methodologies used throughout the financial supplement, including the cost of average deposits, full-time-equivalent employees (FTEs), and the definition of delinquent loans for ratio calculations - **Cost of average deposits:** Equals annualized total interest expense on deposits divided by total average interest-bearing deposits plus total average noninterest-bearing deposits[24](index=24&type=chunk) - **FTEs:** Refers to Full-time-equivalent employees[25](index=25&type=chunk) - **Delinquent loans to total loans ratio:** Equals loans 30-days-or-more past due divided by total loans. For Refund Advances, a loan is considered delinquent if unpaid 35 days after the taxpayer's tax return was submitted to the applicable taxing authority[26](index=26&type=chunk) ```

Financial Overview - As of December 31, 2024, Republic Bancorp, Inc. had total assets of $6.8 billion, total deposits of $5.2 billion, and total stockholders' equity of $992 million[19]. - Republic Bancorp, Inc. ranks as the second largest Kentucky-based financial holding company based on total assets as of December 31, 2024[19]. - As of December 31, 2024, the Bank employed 989 full-time equivalent employees, with a focus on employee retention and well-being[78]. - The Company reported a Total Risk-Based Capital ratio of 16.98%, up from 16.10% in 2023[137]. - The Common Equity Tier 1 Risk-Based Capital ratio for Republic Bancorp, Inc. increased to 15.73% in 2024 from 14.85% in 2023[137]. - Republic Bank & Trust Company maintained a Tier 1 leverage capital ratio of 13.29% in 2024, compared to 13.25% in 2023[137]. - The Company and the Bank are categorized as well-capitalized under Basel III regulations, meeting all required capital ratios[136]. Banking Operations - The company operates 47 full-service banking centers, primarily located in Kentucky, with a significant presence in Metropolitan Louisville[18][21]. - The Traditional Banking segment now includes mortgage banking results, which were previously reported separately, reflecting a strategic reclassification[23]. - The bank's commercial lending activities focus on C&I lending and CRE lending, with targeted credit sizes typically between $1 million and $35 million[33][35]. - The bank is an SBA Preferred Lending Partner, allowing it to expedite the underwriting and approval of SBA loans, generally up to $3 million[41]. - The bank's CRE Division, launched in 2022, focuses on large CRE projects typically ranging from $5 million to $25 million[36]. - The bank's lending activities include construction loans for both residential and commercial properties, with a focus on established builders with solid financial records[42][44]. - The Bank's Private Banking division provides financial products and services tailored to high-net-worth individuals, leveraging the extensive experience of its Private Banking officers[50]. - The Core Bank provides short-term, revolving credit facilities to mortgage bankers, with individual advances expected to remain on the warehouse line for an average of 15 to 30 days[56]. Loan and Credit Products - In 2023, the bank sold $67 million of correspondent loans that were previously classified as held for investment, completing the sale in the second quarter of 2024[25]. - The Republic Credit Solutions (RCS) segment offers unsecured, small dollar consumer loans, with a significant portion of clients considered subprime or near-prime borrowers[74]. - The Bank offers RCS installment loans with terms ranging from 12 to 60 months, with all loan balances carried as "held for sale" on the balance sheet, intended to be sold within sixteen days of origination[81]. - The Bank originates healthcare-receivables products across the U.S., retaining 100% of receivables in some programs, while others are sold within one month of origination[81]. - The ERA loan product, introduced in December 2022, allows taxpayers to borrow funds as an advance of a portion of their tax refund, with a maximum advance amount of $6,500[60]. Regulatory Environment - The Company is subject to extensive federal and state banking laws and regulations, which primarily protect clients and depositors rather than stockholders[93]. - The Dodd-Frank Act and EGRRCPA provide certain exemptions for the Company and Bank, including limitations on interchange fees and regulatory capital requirements[101]. - The Company must obtain prior approval from the FRB for significant transactions, including mergers and acquisitions, which may affect its strategic planning[103]. - The Company and Bank must maintain well-capitalized and well-managed status to retain FHC status, which allows for a broader range of financial activities[107]. - The Bank is subject to federal laws designed to counter money laundering and terrorist financing, including the BSA and the Anti-Money Laundering Act of 2020[119]. - The Bank received an "Outstanding" CRA Performance Evaluation in March 2024, indicating strong compliance with community reinvestment obligations[124]. - The Bank's compliance with consumer protection laws is overseen by the CFPB, which regulates unfair, deceptive, or abusive acts in consumer financial services[122]. Market and Competitive Landscape - The Company faces intense competition from various financial institutions, including local and regional banks, credit unions, and fintech companies, impacting its ability to attract deposits and originate loans[84]. - The small-dollar consumer loan industry is highly competitive, with competitors including payday lenders and fintech companies, which may lead to challenges in retaining clients[91]. - The Bank emphasizes personalized service and local management philosophy to enhance its competitive edge in the market[85]. Financial Risks and Challenges - The Bank's earnings are significantly influenced by the difference between interest earned on loans and investments and interest paid on deposits[146]. - Fluctuations in interest rates could materially affect the Bank's profitability and net interest margin due to the sensitivity of its assets and liabilities[159]. - Approximately 37% of the Bank's total deposits as of December 31, 2024, were uninsured, which may expose the Bank to enhanced liquidity and earnings risks during financial distress[163]. - The Bank's reliance on large deposit relationships could increase funding costs if significant balances are withdrawn, potentially leading to higher overall operational costs[162]. - Mortgage interest rates remained elevated throughout 2024, leading to low mortgage refinance activity and continued low Warehouse demand, which may further decrease earnings in 2025[166]. - The Bank's ability to attract depositors may be limited during periods of market distress, impacting its net interest margin negatively[165]. - The Bank's credit risk associated with Refund Anticipation Loans (RAs) could materially impact financial condition if a significant portion of RAs cannot be collected[168]. - The Allowance for Credit Losses (ACLL) may be insufficient to cover actual loan losses, which could lead to increased provisions and negatively affect financial results[178]. - The Bank's operational risks are heightened by reliance on third-party data, and any failure in these systems could materially impact earnings[186]. - The Bank retains 100% of the balances it originates on certain credit products if it exits those product lines, increasing credit risk significantly[190]. - The Bank's revenue generation from mortgage loan sales is highly dependent on programs administered by Freddie Mac and Fannie Mae, which could materially affect its financial position if changes occur[191]. - Any significant reduction in the operation of Freddie Mac or Fannie Mae would likely prevent the Bank from originating and selling most of its mortgage loans, adversely impacting its business[192]. - A decrease in client deposits due to perceived superior returns from alternative investments could increase the Bank's funding costs and negatively impact its operations[193]. - Prepayment of loans by clients could reduce the Bank's interest income, adversely affecting its financial condition[194]. - The Company is exposed to credit risk from transactions with various financial institutions, which could materially affect its financial condition if defaults occur[195]. - The Company relies on key management personnel, and the loss of these individuals could adversely affect its growth and operational prospects[196]. - Regulatory compliance failures could lead to significant penalties and adversely affect the Bank's earnings, particularly concerning its RPG products[205]. - The Company is significantly impacted by regulatory policies that could negatively affect its liquidity position and earnings, influencing its cost of funds and net interest margin[210].

Financial Performance - Total interest income for Q4 2024 was $103,108,000, an increase from $90,785,000 in Q4 2023, representing a 13.5% year-over-year growth[9] - Net interest income for Q4 2024 reached $75,394,000, compared to $66,782,000 in Q4 2023, marking a 12.2% increase[9] - Net income for Q4 2024 was $19,016,000, compared to $19,659,000 in Q4 2023, a decrease of 3.3%[9] - Net interest income for the year ended December 31, 2024, was $312,154,000, an increase from $288,778,000 in 2023, representing an increase of 8.1%[19] - Net income for the year ended December 31, 2024, was $101,371,000, compared to $90,374,000 in 2023, reflecting a growth of 12.2%[19] Asset and Liability Management - Total assets increased to $6,846,667 thousand as of December 31, 2024, up from $6,692,470 thousand at September 30, 2024, representing a growth of 2.3%[4] - Total liabilities increased to $5,854,638 thousand from $5,712,765 thousand, representing a rise of 2.5%[4] - Total deposits reached $5,210,546 thousand, a 2.1% increase from $5,101,696 thousand in the prior quarter[4] - Total interest-bearing liabilities were $4,434,078,000 in Q4 2024, compared to $3,709,677,000 in Q4 2023, reflecting a 19.5% increase[9] Credit Quality and Allowance for Losses - The allowance for credit losses was $91,978 thousand, an increase from $82,158 thousand in the previous quarter, reflecting a rise of 12.2%[4] - The provision for credit losses in Q4 2024 was $12,951,000, significantly higher than $10,989,000 in Q4 2023, indicating increased risk management measures[9] - Total nonperforming loans increased to $22,760,000 as of December 31, 2024, compared to $20,618,000 as of December 31, 2023, reflecting a 10.4% increase[13] - The allowance for credit losses to total loans ratio improved to 1.69% as of December 31, 2024, compared to 1.57% a year earlier[13] Equity and Shareholder Value - Stockholders' equity increased to $992,029 thousand, compared to $979,705 thousand in the prior quarter, marking a growth of 1.3%[4] - Book value per share increased to $51.01 in Q4 2024 from $50.39 in Q3 2024, an increase of 1.3%[11] - Total stockholders' equity increased to $992,029 thousand as of December 31, 2024, up from $912,756 thousand a year earlier, representing a growth of 8.7%[26] - Tangible book value per share increased to $48.47 as of December 31, 2024, compared to $44.55 a year prior, marking a growth of 8.7%[26] Operational Efficiency - Total noninterest expense increased to $53,511,000 in Q4 2024 from $47,054,000 in Q4 2023, representing a 13.6% rise[9] - The efficiency ratio improved to 60% in Q4 2024 from 55% in Q3 2024, indicating a decrease in operational efficiency[11] - Adjusted noninterest expense for the year ended December 31, 2024, was $202,684 thousand, up from $197,238 thousand in the previous year, representing an increase of 2.3%[27] Interest Margin and Profitability - The net interest margin improved to 4.62% in Q4 2024, compared to 4.36% in Q4 2023, indicating better asset yield management[9] - The company maintained a strong capital position with a net interest margin of 3.64% in core banking for Q4 2024[18] - The net interest margin for the year ended December 31, 2024, was 4.85%, slightly down from 4.91% in 2023[19] Loan Growth and Activity - Loans net of allowance for credit losses rose to $5,347,488 thousand, compared to $5,214,759 thousand in the previous quarter, reflecting an increase of 2.6%[4] - Total loans increased to $5,439,466 in Q4 2024 from $5,296,917 in Q3 2024, reflecting a growth of 2.7%[12] - The company originated $1,231,782,000 in consumer loans for sale in 2024, compared to $756,714,000 in 2023, reflecting a substantial increase of 62.5%[23] Noninterest Income - Noninterest income for Q4 2024 was $14,118,000, down from $14,780,000 in Q4 2023, a decrease of 4.5%[9] - Total noninterest income for 2024 was $72,650,000, compared to $71,457,000 in 2023, showing an increase of 1.7%[19]

Company Structure and Operations - The Company dissolved its wholly owned insurance subsidiary, Republic Insurance Services, Inc., during the last quarter of 2023[238]. - The Bank operates through five reportable segments: Traditional Banking, Warehouse Lending, TRS, RPS, and RCS, with Traditional Banking being the primary segment[252]. - The Traditional Banking segment includes 47 banking centers across various locations, primarily in Kentucky and Florida[254]. - The Bank's principal lending activities include retail mortgage lending, commercial lending, and consumer lending, with a focus on residential real estate loans[255][259][261]. - The Bank's Correspondent Lending channel began acquiring single-family, first-lien mortgage loans for investment in Q1 2023, primarily from Warehouse Lending clients[265]. - The Bank's acquisition strategy aims to selectively grow its franchise alongside organic growth strategies[268]. Financial Performance - Total Company net income for Q3 2024 was $26.5 million, an increase of $5.0 million compared to Q3 2023[291]. - Diluted EPS increased to $1.37 in Q3 2024 from $1.10 in Q3 2023[291]. - Traditional Banking segment net income rose by $3.5 million, or 31%, from Q3 2023 to Q3 2024[292]. - Net interest income in the Traditional Banking segment increased by $3.5 million, or 7%, from Q3 2023 to Q3 2024[292]. - Warehouse segment net income increased by $422,000, or 27%, from Q3 2023 to Q3 2024[294]. - Tax Refund Solutions segment net income increased by $501,000 from Q3 2023 to Q3 2024[296]. - Total Company net interest income was $71.3 million in Q3 2024, a $6.5 million, or 10%, increase from Q3 2023[306]. - Total Company net income for the first nine months of 2024 was $82.4 million, an increase of $11.6 million, or 16%, from the same period in 2023[357]. - Diluted EPS increased to $4.24 for the first nine months of 2024 compared to $3.60 for the same period in 2023[357]. Income and Expense Analysis - Noninterest income in the Traditional Banking segment increased by $1.1 million, or 11%, from Q3 2023 to Q3 2024[292]. - Noninterest income increased by $295,000, or approximately 41%, from Q3 2023 to Q3 2024[297]. - Total Company noninterest income increased by $2.5 million during the third quarter of 2024 compared to the same period in 2023, with Traditional Banking's noninterest income increasing by $1.1 million, or 11%[349]. - Total Company noninterest expense increased by $241,000 during the third quarter of 2024 compared to the same period in 2023[353]. - Traditional Banking's noninterest expense decreased by $234,000, or 1%, for the third quarter of 2024 compared to the same period in 2023[353]. - Total company noninterest expense decreased by $3.1 million, or 2%, during the first nine months of 2024 compared to the same period in 2023[427]. - Traditional Bank noninterest expense decreased by $5.0 million, with a notable reduction in merger-related expenses[429]. Credit Losses and Provisions - As of September 30, 2024, the Company maintained an Allowance for Credit Losses (ACLL) for expected credit losses inherent in its loan portfolio[247]. - The net charge for the total company provision was $5.7 million for Q3 2024, compared to $3.7 million for the same period in 2023, indicating a 54% increase[331]. - The Traditional Banking segment recorded a net charge of $1.5 million in Q3 2024, slightly down from $1.6 million in Q3 2023[332]. - The allowance for credit losses (ACLL) for Traditional Banking was 1.30% as of September 30, 2024, compared to 1.27% as of September 30, 2023[334]. - The ACLL for RCS as a percentage of total loans was 15.70% as of September 30, 2024, up from 13.82% as of December 31, 2023[342]. - The company's net charge-offs to average total loans increased from 0.11% during the third quarter of 2023 to 0.32% during the third quarter of 2024, with net charge-offs increasing by $2.8 million, or 209%[347]. - Total charge-offs for the company reached $49.6 million in the first nine months of 2024, compared to $36.3 million in the same period of 2023[419]. Asset and Liability Management - Total interest-earning assets increased to $6,312,419 thousand for the three months ended September 30, 2024, compared to $5,954,537 thousand for the same period in 2023, reflecting a growth of 6%[328]. - The average rate on total interest-earning assets increased to 6.40% for Q3 2024, up from 5.77% in Q3 2023[328]. - Total liabilities and stockholders' equity reached $6,711,818 thousand as of September 30, 2024, compared to $6,334,835 thousand in the previous year, marking a growth of 6%[328]. - Total interest-bearing liabilities increased to $4,388,790 thousand with an interest expense of $93,118 thousand for the nine months ended September 30, 2024[396]. - The company's net interest spread decreased to 4.03% for the nine months ended September 30, 2024, down from 4.33% in the same period of 2023[396]. Market and Economic Conditions - The Company anticipates potential impacts from inflation on operations and credit losses, which may affect future performance[240]. - The fair value of Mortgage Servicing Rights (MSRs) is influenced by market interest rates, with expected declines during periods of falling rates due to increased prepayment speeds[258]. - The increase in average interest-earning cash was driven by the inverted yield curve, making overnight cash a more appealing option[435]. - The company maintained supplemental on-balance sheet liquidity above required minimums in response to economic uncertainty during the first nine months of 2024[435].

Financial Performance - Net income for Q3 2024 was $26,543,000, up from $19,659,000 in Q3 2023, marking a significant increase of 35.1%[8] - Net interest income for Q3 2024 reached $71,305,000, compared to $64,825,000 in Q3 2023, reflecting a 10.5% increase[8] - Total interest income for Q3 2024 was $101,546,000, an increase from $90,785,000 in Q3 2023, representing a year-over-year growth of 11.4%[8] - Noninterest income totaled $16,813,000 in Q3 2024, down from $18,346,000 in Q3 2023, indicating a decrease of 8.3%[8] - Total noninterest expense for Q3 2024 was $48,609,000, slightly lower than $49,634,000 in Q3 2023, showing a decrease of 2.1%[8] - The company expects continued growth in net interest income and net income for the upcoming quarters, driven by strategic market expansions and new product offerings[19] Asset and Liability Management - Total assets as of September 30, 2024, increased to $6,692,470, up from $6,386,475 a year ago, representing a growth of 4.8%[3] - The total liabilities increased to $5,712,765 from $5,493,075 year-over-year, representing a growth of 4%[3] - Total deposits reached $5,101,696, a slight increase from $5,069,047 in the previous quarter, marking a growth of 0.3%[3] - Total interest-earning assets increased to $6,312,419, up from $5,954,537 in the same period last year, representing a growth of 6%[7] - Total interest-bearing liabilities rose to $4,281,727, compared to $3,508,458, representing an increase of 22%[7] Credit Quality - The allowance for credit losses on loans improved to $(82,158) from $(108,702) year-over-year, reflecting a decrease of 24.5%[3] - The allowance for credit losses increased to $81,567 from $73,438, reflecting a rise of approximately 11%[7] - Total nonperforming assets decreased to $20,757,000 from $21,806,000 in the previous quarter, representing a decline of 4.8%[13] - Nonperforming loans to total loans ratio improved to 0.37% from 0.39% in the previous quarter[13] - The allowance for credit losses to total loans ratio was 1.55%, slightly up from 1.53% in the previous quarter[13] Shareholder Metrics - Stockholders' equity rose to $979,705, up from $893,400 a year ago, showing an increase of 9.7%[3] - Book value per share rose to $50.39 from $49.19 in the previous quarter, reflecting a strong increase in shareholder equity[10] - Basic EPS for Class A Common Stock increased to $1.37 from $1.31 in the previous quarter, and $4.25 for the nine months ended September 30, 2024[10] - The efficiency ratio improved to 55% from 57% in the previous quarter, indicating better operational efficiency[10] - Tangible stockholders' equity increased to $930,065 thousand as of September 30, 2024, compared to $842,598 thousand a year earlier, marking a growth of 10.36%[25] Loan Portfolio - The company reported a net loan balance of $5,214,759, an increase from $5,006,523 a year ago, reflecting a growth of 4.1%[3] - Total loans for the company reached $5,296,917, an increase from $5,264,270 in the previous quarter, representing a growth of 0.62%[12] - Traditional banking loans amounted to $4,566,896, slightly down from $4,589,167, reflecting a decrease of 0.49%[12] - Warehouse lines of credit increased to $595,163, a growth of 8.67% from $549,011 in the previous quarter[12] - The total core banking loans reached $5,162,059, an increase from $5,138,178, representing a growth of 0.47%[12] Operational Highlights - The number of full-service banking centers remained stable at 47, maintaining the company's market presence[10] - The total number of full-time equivalent employees (FTEs) decreased to 992 from 999 in the previous quarter, indicating a slight reduction in workforce[10] - The Republic Processing Group (RPG) includes Tax Refund Solutions, Republic Payment Solutions, and Republic Credit Solutions, which collectively drive revenue through various financial products[15] - Traditional Banking segment focuses on providing loans, investments, and deposits primarily through banking centers and digital channels[16] - Warehouse Lending segment provides short-term credit facilities to mortgage bankers across the United States, contributing to revenue through mortgage warehouse lines of credit[16]

Company Structure and Operations - The Company dissolved its wholly owned insurance subsidiary, Republic Insurance Services, Inc., during Q4 2023[202]. - As of June 30, 2024, the Company operates 47 banking centers primarily in Kentucky, with a focus on traditional banking products[214]. - The Bank's retail mortgage lending includes single-family residential real estate loans and HELOCs, with collateral predominantly located in its market footprint[214]. - The Bank's commercial lending activities are conducted through various channels, including Corporate Banking and Retail Banking, primarily serving clients within its market footprint[220]. - The Company has an acquisition strategy to selectively grow its franchise alongside organic growth strategies[224]. - The Bank's mortgage banking activities involve originating and selling fixed-term residential real estate loans into the secondary market, primarily to FHLMC and FNMA[215]. - The Bank's consumer lending includes home improvement loans and credit cards, although not actively promoted in its markets[221]. - The Bank's Treasury Management Services offer various deposit products and cash management solutions to commercial clients[222]. - The Bank began acquiring single-family, first-lien mortgage loans through its Correspondent Lending channel in Q1 2023, purchasing loans primarily at a premium[223]. - The Bank's Internet and Mobile Banking services enhance market penetration and client account management capabilities[224]. Financial Performance - Total Company net income for Q2 2024 was $25.2 million, an increase of $4.2 million or 20% compared to Q2 2023[243]. - Diluted EPS increased to $1.30 for Q2 2024, up from $1.07 in Q2 2023, reflecting a growth of 21.5%[243]. - Traditional Banking segment net income rose by $2.6 million, or 24%, from Q2 2023 to Q2 2024[244]. - Warehouse Lending segment net income increased by $262,000, or 23%, from Q2 2023 to Q2 2024[247]. - Tax Refund Solutions segment net income grew by $909,000, or 42%, from Q2 2023 to Q2 2024[248]. - Total Company net interest income was $68.5 million during Q2 2024, an increase of $4.0 million, or 6%, from Q2 2023[256]. - Total Company net income for the first six months of 2024 was $55.8 million, a $6.7 million, or 14%, increase from the same period in 2023[298]. - Diluted EPS increased to $2.87 for the first six months of 2024, up from $2.50 for the same period in 2023[298]. Income and Expense Analysis - Noninterest income in the Traditional Banking segment decreased by $1.2 million, or 11%, from Q2 2023 to Q2 2024[244]. - Noninterest income in the Tax Refund Solutions segment decreased by $720,000, or 16%, from Q2 2023 to Q2 2024[248]. - Noninterest expense in the Tax Refund Solutions segment was $2.0 million for Q2 2024, down from $2.2 million in Q2 2023[248]. - Republic Payment Solutions segment net income decreased by $759,000, and net interest income decreased by $1.0 million from Q2 2023 to Q2 2024[249]. - Republic Credit Solutions segment net income increased by $1.1 million, or 29%, and net interest income increased by $2.8 million, or 31%, from Q2 2023 to Q2 2024[250]. - Total Company noninterest income decreased by $613,000 during the first six months of 2024 compared to the same period in 2023, with Traditional Banking's noninterest income decreasing by $1.4 million, or 7%[353]. - Noninterest expense at the RCS segment increased by $1.0 million, or 36%, in Q2 2024, primarily due to higher servicing costs and marketing expenses[298]. Loan and Credit Quality - The net charge to the Provision for the second quarter of 2024 was $5.1 million, a decrease from $6.1 million in the same period of 2023, indicating improved credit quality[276]. - The Traditional Banking segment recorded a net charge of $915,000 in the second quarter of 2024, compared to a net credit of $1.9 million in the same period of 2023, driven by changes in loan mix[276]. - The Allowance for Credit Losses (ACLL) for Traditional Banking was 1.30% as of June 30, 2024, slightly up from 1.26% as of June 30, 2023, indicating stable asset quality[278]. - Total Company net charge-offs increased from 2.37% in Q2 2023 to 2.52% in Q2 2024, with net charge-offs rising by $4.5 million, or 16%[288]. - The incurred loss rate for RAs as of June 30, 2024, was 3.72% of the $874 million total loans originated during the first quarter 2024 tax filing season[282]. - RCS recorded a net charge to the Provision of $5.2 million in Q2 2024, compared to $4.3 million in Q2 2023, representing a 21% increase[283]. - The ACLL for RCS was 15.44% as of June 30, 2024, up from 12.88% as of June 30, 2023[284]. - The total balance of classified and special mention loans decreased by approximately $1.2 million during the first half of 2024[380]. - The total balance of nonperforming loans remained stable at 0.39% of total loans for both June 30, 2024, and December 31, 2023[383]. Deposits and Funding - Total Traditional Bank deposits increased by $202 million to $4.6 billion as of June 30, 2024[299]. - The weighted-average cost of total interest-bearing deposits increased from 1.17% in the first six months of 2023 to 2.74% in the first six months of 2024, with average interest-bearing deposits rising by $705 million[320]. - Core Bank deposits increased by $203 million, or 5%, from December 31, 2023, totaling $4,397,007 thousand as of June 30, 2024[395]. - Interest-bearing deposits in the Core Bank rose by $273 million, driven by a $133 million increase in money market accounts and a $75 million increase in transaction deposits[396]. - Noninterest-bearing deposits decreased by $70 million, continuing a downward trend due to rising market interest rates[397]. - The Company expects slower overall growth and a potential continuing decline in noninterest-bearing deposits in the foreseeable future[398]. Market and Economic Conditions - Management anticipates potential net interest margin compression in the second half of 2024 due to shifts in deposit types and rising borrowing costs[321]. - The company believes its reserves are adequate to absorb expected losses on all nonperforming loans as of June 30, 2024[388]. - The increase in Core Bank deposits was primarily driven by higher interest rates making interest-bearing accounts more attractive to clients[397].

Financial Performance - Total assets as of June 30, 2024, were $6,616,574, an increase of $21,683 from December 31, 2023, and an increase of $246,795 from June 30, 2023[3]. - Total assets increased to $6,706,884,000 in Q2 2024, compared to $6,157,425,000 in Q2 2023, marking a growth of 8.9%[10]. - Net income for Q2 2024 was $25,206,000, an increase of 19.4% from $21,052,000 in Q2 2023[10]. - Net income for the first half of 2024 was $55,812,000, up from $49,144,000 in the first half of 2023, reflecting an increase of approximately 13.6%[21]. - Total noninterest income for Q2 2024 totaled $18,346,000, a decrease from $19,651,000 in Q2 2023[10]. - Total noninterest expense for Q2 2024 was $49,634,000, down from $51,533,000 in Q2 2023, reflecting a decrease of 3.7%[10]. - The efficiency ratio for the second quarter of 2024 was reported at 57%, compared to 42% in the previous quarter, indicating a significant increase in operational efficiency[28]. Loans and Credit Quality - Loans increased to $5,264,270 as of June 30, 2024, up by $24,409 from March 31, 2024, and up by $211,128 from June 30, 2023[3]. - The average balance of loans, including loans held for sale, was $5,262,719 for the three months ended June 30, 2024, a decrease of $191,625 from the previous quarter[4]. - The allowance for credit losses on loans was $80,687 as of June 30, 2024, a decrease of $1,443 from December 31, 2023, and an increase of $8,485 from June 30, 2023[3]. - Total nonperforming loans increased to $20,541, up from $17,504 a year ago, representing a 17.3% increase[14]. - Delinquent loans in the Core Bank segment rose to $9,313, a 59.5% increase from $5,875 a year ago[14]. - The allowance for credit losses to total loans ratio decreased to 1.53% from 2.08% in the previous quarter, indicating improved credit quality[14]. Stockholders' Equity and Book Value - Stockholders' equity increased to $955,423 as of June 30, 2024, up by $42,667 from March 31, 2024, and up by $68,452 from June 30, 2023[3]. - Book value per share increased to $49.19, up $3.95 or 8.8% compared to $45.24 a year ago[12]. - Total stockholders' equity under GAAP increased to $955.423 million as of June 30, 2024, compared to $886.971 million a year earlier[27]. - Tangible stockholders' equity was reported at $905.690 million, reflecting a year-over-year increase from $835.747 million[27]. Interest Income and Margin - Total interest income for Q2 2024 was $97,700,000, an increase of 23.4% compared to $79,054,000 in Q2 2023[10]. - Net interest income for Q2 2024 reached $68,536,000, up from $64,529,000 in Q2 2023, reflecting a growth of 6.2%[10]. - The net interest margin for Q2 2024 was 4.36%, slightly down from 4.46% in Q2 2023[10]. - The yield on average interest-earning assets decreased to 6.21% from 7.91% in the previous quarter, a decline of 21.5%[12]. Operational Metrics - The number of full-time employees (FTEs) decreased to 999 from 1,011 in the previous quarter, a reduction of 1.2%[12]. - The company maintains a diversified operational structure with five reportable segments, enhancing its market reach and revenue generation capabilities[16]. - The Core Banking operations, which include Traditional Banking and Warehouse Lending, are critical for the company's overall performance and stability[17]. - The company continues to focus on improving credit quality metrics while expanding its product offerings in the consumer credit space[17].

Company Structure and Operations - The Company dissolved its wholly owned insurance subsidiary, Republic Insurance Services, Inc., during the last quarter of 2023[197]. - The Company operates through five reportable segments: Traditional Banking, Warehouse Lending, TRS, RPS, and RCS[211]. - The Traditional Banking segment includes 47 banking centers located primarily in Kentucky[213]. - The Bank's principal lending activities include retail mortgage lending, commercial lending, and consumer lending[220]. - The Bank's Correspondent Lending channel began acquiring single-family, first-lien mortgage loans for investment in Q1 2023[226]. - The Bank's Internet and Mobile Banking services enhance market penetration and service delivery[227]. - The Company maintains an acquisition strategy to selectively grow its franchise alongside organic growth strategies[228]. Financial Performance - Total net income for Q1 2024 was $30.6 million, a 9% increase from Q1 2023, with diluted EPS rising to $1.58 from $1.42[251]. - Net interest income decreased by $1.9 million, or 4%, in Q1 2024 compared to Q1 2023[254]. - Noninterest income decreased by $175,000, or 2%, for Q1 2024 compared to the same period in 2023[255]. - Noninterest expense decreased by $2.0 million, or 5%, for Q1 2024 compared to Q1 2023[255]. - Net income increased by $67,000, or 9%, for Q1 2024 compared to the same period in 2023[260]. - Net interest income increased by $3.4 million, or 39%, to $12.0 million for Q1 2024 compared to Q1 2023[265]. - Total Company net interest income was $96.9 million during Q1 2024, an increase of $4.3 million, or 5%, from Q1 2023[269]. Credit Losses and Provisions - As of March 31, 2024, the Company maintained an Allowance for Credit Losses (ACLL) for expected credit losses inherent in its loan portfolio[206]. - The provision for credit losses was a net charge of $358,000 in Q1 2024, down from $3.0 million in Q1 2023[254]. - The Traditional Banking segment's Allowance for Credit Losses (ACLL) was 1.29% of total loans as of March 31, 2024, slightly down from 1.33% as of March 31, 2023[288]. - The total provision for loan losses increased to $30,622,000 in Q1 2024 from $26,766,000 in Q1 2023[300]. - The ACLL (Allowance for Credit Losses) at the end of the period increased to $108,702,000 in Q1 2024 from $96,121,000 in Q1 2023[300]. Loan and Deposit Trends - Total Traditional Bank loans decreased by $45 million, or 1%, during Q1 2024[260]. - Total Traditional Bank deposits increased by $444 million, or 10%, during Q1 2024[260]. - Total loans decreased by $16 million, or less than 1%, to $5.2 billion as of March 31, 2024[323]. - Tax Refund Solutions loans decreased by $92 million, reflecting substantial paydowns of loans originated in December 2023[327]. - Total deposits increased by $367 million to $5.4 billion as of March 31, 2024, representing a 7% increase from December 31, 2023[355]. - Core Bank deposits rose by $445 million, or 10%, with interest-bearing deposits increasing by $505 million and noninterest-bearing deposits decreasing by $59 million[355]. Asset Quality and Nonperforming Loans - Nonperforming loans to total loans for the RCS segment was 1.63% as of March 31, 2024, compared to 1.11% as of December 31, 2023[265]. - Total classified and special mention loans increased by $5.6 million, or 8%, driven primarily by commercial loan downgrades[335]. - The total balance of nonperforming assets increased to $22.9 million, up from $22.0 million at December 31, 2023[341]. - Total nonperforming loans increased to $21,374 thousand as of March 31, 2024, up from $20,618 thousand on December 31, 2023, representing a 3.67% increase[343]. - The percentage of total nonperforming loans to total loans rose to 0.41% as of March 31, 2024, compared to 0.39% as of December 31, 2023[343]. Interest Rate and Capital Management - The dynamic earnings simulation model projected a 2.1% increase in net interest income under a -400 basis points scenario as of March 31, 2024[385]. - The projected net interest income for the Bank showed a deterioration in down-rate scenarios, with significant declines expected due to higher interest-earning cash balances and revised deposit beta assumptions[386]. - The Company elected to defer the impact of CECL on regulatory capital, which will phase in over five years, affecting capital ratios by approximately 6 basis points[379]. - The interest rate risk is considered significant to the Bank's overall earnings and balance sheet, with ongoing monitoring and management strategies in place[381]. - The Bank's average stockholders' equity to average assets ratio was 12.92% as of March 31, 2024, down from 14.21% at the end of 2023[376].

Financial Performance - Net income for Q1 2024 was $30,606,000, an increase of $2,514,000 or 8.9% compared to Q1 2023[10] - Net income for the first quarter of 2024 was $30.606 million, an increase from $28.092 million in the same period of 2023, representing a growth of 8.9%[20] - Total noninterest income for Q1 2024 was $23,373,000, up from $22,681,000 in Q1 2023, marking a rise of 3.1%[20] - Total interest income for Q1 2024 was $130,632,000, an increase of $30,276,000 or 30.1% compared to Q1 2023[10] - Net interest income for Q1 2024 was $96,919,000, up from $92,642,000 in Q1 2023, reflecting a $4,277,000 increase[10] - Total adjusted income, a non-GAAP measure, rose to $120,292 thousand for the quarter, up 4.1% from $115,322 thousand year-over-year[26] Assets and Liabilities - Total assets increased by $280,701 thousand from December 31, 2023, to $6,875,592 thousand, and by $801,501 thousand from March 31, 2023[4] - Total assets grew to $7,219,572,000 in Q1 2024, compared to $6,213,041,000 in Q1 2023, marking a year-over-year increase of 16.2%[10] - Total deposits grew by $367,486 thousand from December 31, 2023, to $5,420,649 thousand, and by $620,981 thousand from March 31, 2023[4] - Total interest-bearing liabilities rose to $4,643,647 thousand, an increase of $1,532,294 thousand compared to the same period last year[5] - The average balance of interest-earning assets increased to $6,641,448,000 in Q1 2024 from $5,679,926,000 in Q1 2023, reflecting a growth of 16.9%[10] Loans and Credit Losses - Total loans for the company decreased to $5,224,292, down $15,569 from the previous quarter and up $450,058 from the same quarter last year[13] - The allowance for credit losses on loans increased by $26,572 thousand from December 31, 2023, to $108,702 thousand, and by $12,581 thousand from March 31, 2023[4] - Provision for credit losses increased to $30,622,000 in Q1 2024 from $26,766,000 in Q1 2023, representing a $3,856,000 increase[10] - The allowance for credit losses to total loans ratio increased to 2.08% from 1.57% as of March 31, 2023, reflecting a rise of 0.51 percentage points[15] - The company reported a decrease in automobile loans to $2,054, down $610 from the previous quarter and down $3,213 year-over-year[13] Stockholders' Equity - Stockholders' equity increased by $22,827 thousand from December 31, 2023, to $935,583 thousand, and by $53,381 thousand from March 31, 2023[4] - Total stockholders' equity increased to $935,583 thousand as of March 31, 2024, up from $882,202 thousand a year earlier, representing a growth of 6.04%[25] - Tangible stockholders' equity reached $885,663 thousand as of March 31, 2024, up from $829,365 thousand a year earlier, marking a growth of 6.8%[25] - Book value per share rose to $48.20, an increase of $3.55 or 7.95% from $44.65 a year ago[12] Efficiency and Ratios - The efficiency ratio improved to 42% from 44% year-over-year, indicating better operational efficiency[12] - The net interest margin decreased to 5.87% in Q1 2024 from 6.52% in Q1 2023[10] - The net interest margin for Q1 2024 was 5.87%, down from 6.52% in Q1 2023, reflecting a decrease of 10%[20] - Return on average assets improved to 1.70% compared to 1.81% in the previous year, reflecting a decrease of 0.11%[12] Employee and Operational Metrics - Total employees at the end of the period decreased to 1,011, down by 20 from 1,031 a year ago[12] - Number of full-service banking centers increased to 47, up by 3 from 44 a year ago[12] Nonperforming Assets - As of March 31, 2024, total nonperforming assets increased to $22,859,000 from $18,139,000 a year earlier, representing a change of $4,720,000 or 26.0%[15] - Total nonperforming loans rose to $21,374,000, up from $16,610,000, marking an increase of $4,764,000 or 28.7% year-over-year[15] - The ratio of nonperforming loans to total loans was 0.41% as of March 31, 2024, compared to 0.35% a year earlier, reflecting an increase of 0.06 percentage points[15]

Financial Overview - As of December 31, 2023, Republic Bancorp, Inc. had total assets of $6.6 billion, total deposits of $5.1 billion, and total stockholders' equity of $913 million[21]. - Republic ranked as the second largest Kentucky-based financial holding company based on total assets as of December 31, 2023[21]. - As of December 31, 2023, the Company had 1,019 full-time equivalent employees, with no employees under collective bargaining agreements[81]. - The Company estimates that 35% of its total deposits as of December 31, 2023, were uninsured, which may increase liquidity risk[168]. Lending Activities - The Bank's principal lending activities include retail mortgage lending, commercial lending, and consumer lending, with a focus on loans secured by owner-occupied residential real estate[26][31][44]. - The targeted credit size for commercial and industrial (C&I) lending relationships is typically between $1 million and $10 million, with larger targets for corporate banking[32]. - The Bank's commercial real estate (CRE) division focuses on large projects typically ranging from $5 million to $25 million, with an emphasis on low credit risk[35]. - The Bank is an SBA Preferred Lending Partner, allowing it to expedite the underwriting and approval of SBA loans up to $3 million[39]. - The Bank's mortgage division includes a Retail Channel and Consumer Direct Channel, originating single-family residential loans and home equity lines of credit (HELOCs)[26]. - Marine lending, initiated in 2023, offers loans ranging from $100,000 to $1,000,000, requiring higher creditworthiness than typical consumer loans[47]. - The Bank's Correspondent Lending channel purchased a block of single-family, first-lien mortgage loans during the second and third quarters of 2023, with premiums amortized into interest income over the expected life of the loans[51]. - The Bank's Private Banking division provides tailored financial products and services to high-net-worth individuals, leveraging extensive banking experience[49]. - The Bank offers two line-of-credit products, LOC I since 2014 and LOC II since January 2021, targeting generally subprime borrowers[77]. - The RCS installment loan product has terms ranging from 12 to 60 months, with all loan balances currently held for sale on the Bank's balance sheet[78]. Business Segments - The Company is divided into six reportable segments: Traditional Banking, Warehouse, Mortgage Banking, TRS, RPS, and RCS, with the first three considered "Core Banking" operations[24]. - The Republic Payment Solutions segment includes prepaid and debit solutions, with interchange revenue from prepaid card transactions reported as noninterest income[73]. - The Republic Credit Solutions segment focuses on unsecured, small dollar consumer loans, with a significant portion of clients considered subprime or near-prime borrowers[75]. Growth and Expansion - The Company has plans for future growth and expansion, focusing on enhancing its lending capabilities and market presence[17]. - The Bank's acquisition strategy aims to selectively grow its franchise alongside organic growth strategies[53]. Competition and Market Risks - The Bank faces intense competition from various financial institutions, including local and regional banks, credit unions, and fintech companies[86]. - The Bank's competitors may have greater resources and established client bases, leading to potential competitive disadvantages[87]. - The prepaid card industry is experiencing increasing competition from various companies and large retailers integrating financial services[92]. - The small-dollar consumer loan industry is highly competitive, with various competitors including payday lenders and fintech companies[93]. - Recent bank failures have negatively impacted customer confidence in regional banks, increasing competition for deposits and raising funding costs[166]. Regulatory Environment - Regulatory changes, such as the Dodd-Frank Act and the Economic Growth, Regulatory Relief and Consumer Protection Act, impact the Company's operations and regulatory requirements[104]. - The Company is required to obtain prior approval from the FRB for mergers or acquisitions that would result in owning more than 5% of any class of voting shares of a bank[106]. - The Company is classified as a Financial Holding Company (FHC), allowing it to engage in a broader range of financial activities compared to a Bank Holding Company (BHC)[108]. - To maintain FHC status, the Company must remain well-capitalized and well-managed, with a "Satisfactory" rating under the CRA[109]. - The Bank received an "Outstanding" CRA Performance Evaluation in March 2023, indicating strong compliance with community credit needs[127]. - The Company must comply with various federal and state consumer protection laws, including the Fair Credit Reporting Act and the Truth in Lending Act[123]. - The Company is subject to anti-money laundering laws, which require robust compliance programs to avoid significant penalties[121]. - The Company has implemented a comprehensive information security program to safeguard customer information and comply with regulatory requirements[128]. Financial Performance and Risks - The Bank's earnings are significantly influenced by the difference between interest earned on loans and investments and interest paid on deposits[151]. - Future changes in laws and regulations affecting the Company's operations are unpredictable and could impact profitability[155]. - The Company has adopted a Responsible Compensation and Sales Practices Program to comply with interagency guidance on incentive and executive compensation[150]. - Mortgage Banking revenue is expected to continue declining due to low mortgage demand resulting from an elevated interest rate environment[174]. - The Federal Open Market Committee (FOMC) has raised the Federal Funds Target Rate multiple times, contributing to elevated mortgage rates and low refinance activity throughout 2023[171]. - The Company may face increased funding costs if it loses large deposit relationships, as it would need to rely on more expensive funding sources[165]. - The Bank's net interest margin may be adversely affected by an inversion of the interest rate yield curve, which could occur if short-term rates rise above long-term rates[163]. - The Company is subject to significant credit risks associated with Refund Anticipation Loans (RAs) and Earned Refund Anticipation Loans (ERAs), which could materially impact financial results if collection rates decline[176][180]. - The Warehouse Lending business faces risks from intense competition and declining mortgage demand, which could lead to decreased earnings[172]. - The Company has traditionally relied on client deposits, with approximately 6% of deposits concentrated with the top 20 depositors, making it vulnerable to funding disruptions[164]. - Changes in the legal and regulatory environment may necessitate management's revisions to product parameters, potentially impacting performance negatively[183]. - The Bank's loan portfolio is at risk due to potential inaccuracies in borrower information, which could lead to additional charge-offs adversely affecting financial results[190]. - Approximately 34% of the Bank's portfolio is secured by residential real estate and another 34% by commercial real estate, both heavily reliant on third-party appraisals[191]. - The Bank's financial condition could be negatively impacted by environmental liabilities associated with properties it owns or forecloses on[192]. - The Bank's revenues and earnings are highly concentrated in line-of-credit products, and any discontinuation or significant change in these products would materially affect financial results[196]. - The Bank is highly dependent on programs administered by Freddie Mac and Fannie Mae, and changes in these programs could adversely affect its business[199]. - Prepayment of loans by clients may reduce the Bank's interest income, negatively impacting financial results[203]. Cybersecurity and Operational Risks - The Company faces risks related to cybersecurity threats, which could result in substantial costs and negative consequences if successful attacks occur[207]. - The Company relies heavily on third-party service providers, and any difficulties they experience could interrupt operations and adversely impact business[206]. - New lines of business or products may introduce additional risks, and failure to manage these risks could materially affect the Company's financial condition[211]. - The Bank may face goodwill impairment, which could negatively impact earnings if the fair value of a reporting unit falls below its carrying amount[212]. - The annual goodwill impairment test was conducted as of September 30, 2023, and incorrect management judgment could lead to a significant write-down of goodwill[213]. - The Bank's RPG products pose substantial legal and regulatory risks, with potential material negative impacts on earnings if compliance is not maintained[214]. - Non-compliance with statutory and regulatory requirements could expose the Bank to civil penalties and litigation risks, affecting its financial performance[214]. - Regulatory actions or litigation regarding RPG products could necessitate substantial alterations or discontinuation, leading to a material negative impact on earnings[214].